Liberal firebrand Sen. Elizabeth WarrenElizabeth WarrenHillicon Valley — Presented by LookingGlass — Congress makes technology policy moves Warren, Jayapal demand answers on reported judicial ethics violations Warren calls for Amazon breakup MORE (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.
The clash, which is highly unusual among party colleagues in the upper chamber, came at a private caucus meeting about a subject that is helping Republicans land blows against their Democratic opponents.
“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’”
Warren was referring to a deal Sen. Joe ManchinJoe ManchinOn The Money — Progressives play hard ball on Biden budget plan Schumer, McConnell headed for another collision over voting rights Overnight Energy & Environment — Presented by ExxonMobil — Climate divides conservative Democrats in reconciliation push MORE (D-W.Va.) and two other members of the caucus, Sens. Tom CarperThomas (Tom) Richard CarperIs the Biden administration afraid of trade? Congress sends 30-day highway funding patch to Biden after infrastructure stalls Senate to try to pass 30-day highway bill Saturday after GOP objection MORE (D-Del.) and Angus KingAngus KingSenate to vote next week on Freedom to Vote Act GOP tries to take filibuster pressure off Manchin, Sinema Hillicon Valley — Presented by American Edge Project — TSA to issue cybersecurity directives to secure rail, aviation sectors MORE (I-Maine), struck with Republicans to peg student-lending rates to the 10-year Treasury notes.
Sen. Tom HarkinThomas (Tom) Richard HarkinFCC needs to help services for the deaf catch up to videoconferencing tech Biden celebrates anniversary of Americans with Disabilities Act Ex-Rep. Abby Finkenauer running for Senate in Iowa MORE (D-Iowa), the chairman of the Health, Education, Labor and Pensions Committee, stood up to announce to colleagues that a fact card passed out by Manchin summarizing his proposal contained two mistakes.
Harkin disputed Manchin’s claim that, under the bipartisan proposal, the interest rates for new Stafford loans would be 3.66 percent. Harkin said that claim failed to reflect that under the Manchin proposal, the rates on undergraduate Stafford loans would hit 7.1 percent by 2019.
Under the law that expired on July 1, the rate for subsidized Stafford loans was 3.4 percent. It has jumped to 6.8 percent and will remain at that level until Congress acts.
Harkin also hit Manchin for claiming the bipartisan plan places a cap on interest rates.
The bipartisan proposal in the Senate would cap student loan rates at 8.25 percent, but only for consolidated loans, not individual ones.
Manchin and his allies, Carper and King, pushed back against the pressure. They took the rare step of holding a competing press conference with reporters in the Ohio Clock corridor while Senate Majority Leader Harry ReidHarry Mason ReidDemocrats brace for tough election year in Nevada The Memo: Biden's horizon is clouded by doubt Fight over Biden agenda looms large over Virginia governor's race MORE (D-Nev.) touted a separate Democratic proposal to reporters. That plan, sponsored by Sen. Jack ReedJack ReedLIVE COVERAGE: Senators press military leaders on Afghanistan Top Republican: General told senators he opposed Afghanistan withdrawal We have a plan that prioritizes Afghanistan's women — we're just not using it MORE (D-R.I.), would freeze the rate for subsidized Stafford loans at 3.4 percent for another year.
The bipartisan plan endorsed by Manchin and the others would set interest rates for undergraduate Stafford loans at the 10-year Treasury rate plus 1.85 percent. It would set the rates for unsubsidized graduate Stafford loans at the 10-year Treasury rate plus 3.4 percent.
It would reduce the deficit by $1 billion over 10 years, which Warren and other liberals have characterized as balancing the budget on the backs of students.
The rival messages appeared to exasperate Sen. Charles SchumerChuck SchumerSenate to vote next week on Freedom to Vote Act To Win 2022: Go big on reconciliation and invest in Latinx voters McConnell-aligned group targeting Kelly, Cortez Masto and Hassan with M ad campaign MORE (N.Y.), the Senate Democratic messaging chief, who engaged in an animated conversation with Manchin, Carper and King before they met with reporters.
Reid tersely described Tuesday’s caucus meeting as “lively.”
While Manchin, Carper and King stood only a few yards down the ornate corridor outside the Senate chamber, Reid drew a line, declaring he would only back a plan that guarantees student loan rates will remain below the current 6.8-percent rate.
“I’ve told my caucus, I’ve told individual senators, if you can explain to me why doing something is better than doing nothing, then we’ll do it,” he said. “All the proposals, within two years, at the outside three years, make the rate more than 6.8 percent.”
Backers of tying the loan rates to Treasury bonds point out that it would result in lower rates now, but Reid said that interest rates are just now beginning to rise from all-time lows, with nowhere to go but up.
“We have the lowest interest rates we’ve had in the history of this country,” he said. “Interest rates are going to go up, and who’s going to suffer from that? Students.”
After speaking to reporters, Reid planned to meet with Education Secretary Arne DuncanArne Starkey DuncanStripping opportunity from DC's children Catherine Lhamon will make our schools better, fairer, and more just Providing the transparency parents deserve MORE and White House chief of staff Denis McDonoughDenis Richard McDonoughExpats plead with US to deliver COVID-19 vaccines Veteran suicides dropped to lowest level in 12 years Veterans grapple with new Afghanistan: 'Was my service worth it?' MORE to further discuss the matter.
Manchin and Carper said they hoped their proposal would receive a vote on the Senate floor, but Harkin said that would not happen Wednesday.
“Why should there be a side-by-side?” he said.
Harkin said Manchin could offer his plan as an amendment if the Senate votes to proceed on the Democratic alternative freezing the rate for subsidized Stafford loans at 3.4 percent for one year.
The Senate will vote Wednesday to end debate on the motion to proceed to that measure.
Proponents of a one-year freeze of the lower, 3.4 percent rate argued ahead of the floor vote that Congress should tackle the rate as part of comprehensive reforms to higher education, coming as part of the reauthorization of the Higher Education Act.
“It will give us time to look at student lending in a comprehensive way,” said Reed.
There were indications Tuesday that Democrats were looking for some sort of compromise, and some may be enticed to join the market-based approach pushed by Manchin and others. Sen. Claire McCaskillClaire Conner McCaskillEx-Rep. Akin dies at 74 Republicans may regret restricting reproductive rights Sunday shows preview: States deal with fallout of Ida; Texas abortion law takes effect MORE (D-Mo.), said she could back student loan interest rates based on market movements as long as there are sufficient caps on the rates.
“We might find a sweet spot if we could do a little bit of market, a little bit of caps, and see if we can’t put together a bipartisan group on that,” she said.
And Sen. Bob CaseyRobert (Bob) Patrick CaseyDemocrats struggle to gain steam on Biden spending plan Building back better by investing in workers and communities Barletta holds wide lead over GOP rivals in early poll of Pennsylvania governor race MORE Jr. (D-Pa.), who is a co-sponsor on Reed’s one-year freeze bill, said he was very interested in finding a longer-term solution.
“I’m willing to listen to anything,” he said. “I think it’s vital we start trying to move forward on a longer-term plan.”
Despite the efforts of Manchin and King, it was clear that some liberal lawmakers would not be swayed.
Sen. Bernie SandersBernie SandersOn The Money — Progressives play hard ball on Biden budget plan The Hill's Morning Report - Presented by Altria - Biden: We will fix nation's problems Left doubles down on aggressive strategy MORE (I-Vt.), a strong proponent of freezing the lower rates, called the bipartisan bill “totally insane.”
“The American people would laugh at that. It’s not a proposal,” he told The Hill, adding that the administration’s push for a market-based student loan rate is also a nonstarter.
“We should make sure working families in this nation can afford college,” he said. “The White House’s proposal is absurd as well.”
Meanwhile, Senate Republicans looked to keep up pressure on Democrats, again highlighting that the White House has also called for student loan rates tied to Treasury bonds.
Sen. Lamar AlexanderLamar AlexanderMcConnell gets GOP wake-up call The Hill's Morning Report - Presented by Alibaba - Democrats return to disappointment on immigration Authorities link ex-Tennessee governor to killing of Jimmy Hoffa associate MORE (R-Tenn.), who is a co-sponsor of the compromise bill, said a one-year freeze would leave students “twisting in the wind,” and make student loans a regular political football like the so-called “doc fix.”
— Published at 4:56 p.m. and updated at 8:23 p.m.